CareEdge flags income growth, value fashion and e-commerce as drivers.
India’s apparel retail market is poised for strong growth over the next five years and is expected to reach nearly Rs 16 trillion by 2029–30, driven by rising disposable incomes, rapid digitalisation and robust expansion in value fashion and e-commerce, according to a report by CareEdge Ratings.
The size of the apparel retail market is estimated at Rs 9.30 trillion in 2024–25 and has grown at a compound annual growth rate (CAGR) of around 7 per cent since 2017–18. CareEdge said the sector’s medium-term outlook remains positive, supported by favourable demographics and evolving consumer preferences.
Organised retail currently accounts for about 41 per cent of the total apparel market and is expected to outpace overall industry growth, expanding at a CAGR of 10–13 per cent. This acceleration is being driven by a growing preference for branded apparel, the entry of international brands and the continued expansion of organised retail formats across the country.
Value fashion is emerging as a key growth engine, benefiting from rising brand awareness and high price sensitivity among consumers. The value fashion segment, estimated at Rs 3.5 trillion in 2023–24, is projected to grow at a CAGR of 7 per cent to reach around Rs 5 trillion by 2029–30. Retailers such as Zudio, Max Fashion and Reliance’s Yousta are rapidly expanding their presence, especially in Tier-2 and Tier-3 cities, which are increasingly becoming important consumption centres.
E-commerce is also playing a crucial role in reshaping the apparel retail landscape. Online channels currently contribute nearly 22 per cent of organised apparel retail and are expected to increase their share to about 25 per cent by 2029–30, translating into a market size of approximately Rs 5 trillion. Higher internet penetration, widespread smartphone usage and the growing influence of Gen-Z consumers are accelerating the shift towards digital-first and omnichannel strategies.
While the industry faced demand pressures in 2024–25 due to inflation and adverse weather conditions, CareEdge noted that a recovery was visible during the festive and wedding season, aided by higher footfalls, promotional online sales and improving consumer sentiment. The report added that recent GST changes are likely to benefit the value segment, as apparel priced below Rs 2,500 attracts a lower 5 per cent tax rate, boosting affordability and volumes.
News source: ANI